Housing and Building Minister quizzed in Parliament over revolt within Auckland Council against housing intensification; says supports intensification in leafy Eastern and Northern Suburbs; Key keener on intensification in CBD, West Auckland

By Bernard Hickey

Housing and Building Minister Nick Smith has reiterated his support for an Auckland Unitary Plan that allows intensification of housing in the leafy Eastern and Northern suburbs -- a plan which many National party supporters are actively trying to over-turn.

A revised set of maps proposed by Council to the Unitary Plan's Independent Hearings Panel (IHP) in December has unleased a back-lash by councillors allied to National. A public meeting organised last week in Kohimarama by senior National Party figure Desley Simpson led to a shift in the balance of support for the intensification plan that could see the Council either withdraw its proposal to the IHP or reject its recommendations due in July. A refusal by the Council to agree to more intense zoning maps could derail a Government push for more housing supply in Auckland.

The debate is set to intensify again next week when the Auckland Council holds a meeting to discuss the intensification issue. It is not clear whether the Council can or will be able to withdraw its proposal at the meeting.

Smith weighed into the debate on Tuesday by calling for the Council to 'stay the course' and keep its more intense development plans, but Prime Minister John Key was more equivocal in comments on Monday where he said the Unitary Plan was the Auckland Council's plan and not the Government's. Key also said intensification would be less controversial in the CBD and West Auckland, while intensification elsewhere would be a matter for debate and a decision by the Council. He had been asked about intensification in the Eastern Suburbs and the North Shore. See my article from Tuesday.

Smith was questioned again about the controversy by Labour Housing Spokesman Phil Twyford. He was also queried by National's support partners, Epsom MP David Seymour and Maori MP Marama Fox. Seymour opposes the intensification and Fox asked Smith about a Special Housing Area being developed at Mangere by Fletcher Residential. Iwi and local residents oppose the 480 home development on the 32 ha of land at Oruarangi Rd, which was once used for Maori burial caves. Smith said the Mangere development was a matter for the Environment Court.

Smith trumpeted the Government's support for Fletcher Residential's Three Kings development project earlier this month when the Government joined legal action to oppose local residents wanting to stop the brownfields development of 1,500 homes.

Smith was asked if he supported the intensification of housing in Auckland, which the Reserve Bank, Productivity Commission and Property Council have also called for.

"The Government’s view has always been that Auckland needs to grow both up and out," Smith said.

"The core reason Auckland housing prices have increased so dramatically since 2000 is that there have been vocal opponents to both greenfield development as well as intensification who have been able to use the council planning and Resource Management Act legislation to stall both. Special housing areas are helping resolve this problem in the short term but long-term the answer is getting the Unitary Plan and the Resource Management Act reforms right," he said.

Only town centres and transport hubs?

He was then asked if he supported intensification in Auckland’s eastern suburbs and the North Shore.

"Yes, and if the member reads the Government’s submission to the Independent Hearings Panel, we have made plain that we broadly support intensification," Smith said.

"The discussion is to be had around where there is a pretty good consensus that it needs to occur around town centres and around transport hubs and, where there is a detailed debate as to how far it goes beyond that, our Government has provided for an Independent Hearings Panel.

"It will listen to submissions and decide on the balance of where that needs to occur," Smith said.

One risk for the Government is that if the Council backflips on its support for intensification and rejects the IHP's finding, the Government faces the prospect of either having to take the Council to the Environment Court through years of litigation or to take over consenting centrally. That's because the Special Housing Area legislation that allows consents to be fast-tracked around Resource Management Act processes is due to lapse in September this year. It was supposed to be replaced by an Auckland Unitary Plan with fresh zonings that allowed enough scope to build enough houses.

The old de-intensified version of the proposed Auckland Unitary Plan was estimated to be at least 200,000 houses short of the 400,000 houses needed over the next 30 years to cope with an extra million people.

What about central intervention?

Smith was then asked if he would follow through on threats to take over planning centrally if the Unitary Plan was delayed.

"It is hugely important for Auckland that we get a Unitary Plan in place. We have the special housing areas legislation that we have been using for the last 4 years to override those old plans and get that fourfold increase in the rate of house build going on in that city," Smith said.

"The Government’s preference is to get a smooth transition from those special housing areas to the new Auckland Unitary Plan, and we will continue to work with the Auckland Council to achieve that because it actually matters to the very real issue of housing affordability."

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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67 Comments

What a joke - this was always likely to deteriorate into a NIMBY scenario with the National supporters and their vested interests able to determine the outcome. Smith rants on about his 4 years of creating SHA's but these will expire in October and have just been politicking as pretty much nothing has been built. We need a four year election cycle for council so that things can be auctioned without councillors worrying about reelection prospects. Key and Smith at odds win one another - what a mess!

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maybe that is why key appointed nick smith as minister, there is no desire to do anything so lets appoint the right person to make sure

Interesting theory. Would explain a lot.

"The Government’s preference is to get a smooth transition from those special housing areas to the new Auckland Unitary Plan, and we will continue to work with the Auckland Council to achieve that because it actually matters to the very real issue of housing affordability."

But Nick the council clearly don't want to address the issue.

Actually I think it is worse than that. I think they don't know how to fix it, and they are so enamoured of their own opinions that they are not (or won't) listen to anyone else. they are afraid of stepping on the toes of money. They have bought into the economic theory of free market and are sacrificing the country on that altar in the name of capitalist greed. They believe the lower and middle classes can't touch them and so they are doing a Nero. Problem is be it local or national, I don't think any of the other political parties have a clue either.

I think the problem is more fundamental, the sums to fix it are in the many billions and seeing that they know there is no way to fund it.

That is another way of putting it Steven. Because they have been slow to acknowledge the problem, it has gotten so far out of hand, that solutions that would have worked 20 years ago and headed off the issue are too costly today and therefore not workable. Sir Dove-Meyer Robinson pissed a lot of people off talking about this issue, and the accompanying infrastructure problems when he was the mayor that he was eventually pushed out. Early recognition and action is hard to achieve because pollies get second guessed at every turn, so lots just doesn't get done until it's almost impossible to fix easily.

The solutions were too costly 20 years ago as well.

Good grief. In what way do you think Auckland Council's management of housing supply reflects the economic theory of free market?

The rich love the free market when it makes them better off, but not when it doesn't.

It's hardly a startling revelation to point out that people like being made better off more than they like not being made better off, and neither is this unique to rich people.

Anyway, that is precisely why what is going on in the Auckland housing market does not reflect a belief in free market economics. What it reflects is attempts by the Council to prevent the workings of the free market at the behest of its voters.

I disagree. As I understand it, a basic principle and assumption of the free market is that all participants essentially work from a level playing field. Thus any distortions are limited and overtaken by the sheer mass of the market. However this is clearly not the case here. I don't think you can hold your position without some kind of support. The numbers against you are the number of homeless and why, both increasing and unaffordability, not unavailability. The REINZ will tell you that there are plenty of houses to sell but at what price? I firmly believe and believe that most others think this too, that this market is wildly distorted by investors, irrespective of from where they are, with money to burn shutting out ordinary Kiwis. Try this on for size - have the Government regulate to put a cap on the total rent that could be charged for a house (not just a room) at $200 per week (about 25 - 30% the average take home pay). what would this do to house prices? I believe that they would drop significantly as local and some foreign investors bail because their returns would get the legs cut out from under them. The supply would dramatically increase (without having to develop any new supply). the banks, speculators and more than a few investors would suffer somewhat, but I am talking about looking after ordinary Kiwis on average incomes. Now include legislation to limit property ownership to residents only, stopping the use of our property market as a money laundering tool, what then?

Fixing rents and rents controls..? Not going to fly, Even the commies won't go for it today.

It is not the Councils management of the housing supply that is the issue, it is the whole picture about attitudes toward growing personal wealth and speculation at the cost of those who can't. With little to no regulation (or enforcement), property prices in AK have gone way beyond crazy, and now the regions are beginning to follow. This is not people buying homes for themselves, it is investors, speculators or what ever you want to call them. Some are doing it from overseas, be it China, America or Europe. There is nothing to stop them, nothing to even measure the degree of it occurring (thus the Government can say there is no evidence of a problem). It is all in the name of a free market economy where the market decides the level, however as some other commentators have identified it does not compensate for large money distorting and manipulating the market.

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FOR CHRISTS SAKES GET BUILDING!!!!
Went down to the old country Wellington Region for a break it was great like old times. Came back to Asia Minor (Auckland) and couldn't help feeling like a foreigner; wealthy immigrants have brought Kiwis out. I'd love to say its a beautiful world and a better place, but its not! it's worse, a rat race with hardness and selfishness that didn't exist here in the 70's and 80's.
Keys open door policy is only making a brighter future for the few who purchased property around this time. The immigrants are vivaciously taxing the resources - education, health, housing, jobs etc. at the cost of generations of Kiwis who paid for it with hard sweat and toil.

Nothing will change, and it isn't going to get better

You can save a copy of your comment, and re-produce it here again next year, and again in 2018, and again in 2019, and again in 2020

The mercantilists thought the only way to increase a nation's wealth was through import of another nation's minerals through plunder. The neoliberalist thinks the only way to increase a nation's wealth is through import of another nation's wage slaves through immigration and capital through asset sales. The notion/roots of capitalism are but a memory.

That's your opinion but there are lots of people that like the 'rat race' and find smaller cities boring. The good news is that you have your pick of any NZ city other than Auckland if you don't like the 'rat race'.

quote - there are lots of people that like the "rat race"

In the here and now you are talking about blow-ins who came for the "smaller city"
If they wanted a "bigger city" they would have gone somewhere else

In the future all those born in Auckland after 2005 simply won't know any better
They will think it's heaven

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@ jimbojones

Sure, seems fair.

Yeah, why should I get mightily p!ssed off?

I mean, in my case born and bred in Auckland, (for nearly 50 years), my kids are here, my elderly parents are here, friends here...

But of course! I should suck it up and leave MY HOME TOWN so the NEW arrivals who bought their way in with dirty money can turn this once lovely city into an overcrowded, dirty, dump like Shanghai and/or Mumbai. (Ironically what they are wanting to get away from..)

No way sorry - if they want to come here then they should have to go to a different region that could do with a population boost - Auckland is full - period.

Already the tell-tale signs...insane traffic to get anywhere, houses on suburban streets with 6-8 cars out the front as multiple families are crowded into them, the proliferation of those classy and "value-adding" $2 shops everywhere...been to Queens St lately?? You wouldn't know you were in NZ.

I actually support controlled immigration, it add's flavour and contrasts to the mix but this unrestrained economic invasion of Auckland is beyond the pale.

And you know what...if you like the "rat race" guess that means you're a rat. Sorry, I want my children to live like humans in the country of their BIRTH.....

You are European by any chance? Maybe the Maori loved Auckland before your family came and overcrowded it with their dirty money...
Unfortunately change is a part of life. You don't have a right to dictate the ideal population and ethnic makeup of Auckland just because you have lived here for 50 years.
I've lived in Auckland for 20 years and I think it is better now than it ever has been.

quote
I've lived in Auckland for 20 years and I think it is better now than it ever has been

Oh dear - where are you from?

Napier. Its a nice place for a holiday but its bloody boring...

Nice attempt at re-direction....

Seriously comparing now with then...yeah...don't think so. 99% of the world was controlled by who had the guns back then and superpowers had colonies everywhere so I'm not buying into that.

And last time I checked NZ Citizens ABSOLUTELY have a right to dictate the direction their country takes in every which way..(that's that voting thingy we do every 3 years)

Yes, I'm of NZ European extraction - what's that got to to with the argument of overcrowding and uncontrolled immigration into one area of NZ?

I'll re-iterate - I don't care if the new immigrants piling in are from the USA, Canada or the UK. It just so happens that the majority in Auckland are not - they are from China and India and that's a simply fact - not racism.

And you've conveniently missed my point that I support controlled, skill based immigration...(from anywhere) but what we have now is madness.

Glad you enjoy the "rat-race" .. I dare say you'll find yourself in a minority otherwise the approx 30k escaping each year to the regions wouldn't be happening.....

A lot of those 30k 'escaping' are due to the massive house price differences between Auckland and the rest of NZ. I don't want to leave Auckland but the prospect of being significantly better off financially after selling our overpriced Auckland house is very tempting. But the fact that there are only 30k 'escaping' despite the huge financial incentive to do so shows that a large number of people like living in the 'rat race'

We don't have unrestrained immigration. Far from it. I've seen plenty of folks going through the process. It's hard and expensive.

Agree that there needs to be restrictions on immigration and foreign investment. But I think you might have a dated version of what it means to be kiwi. People of Asian ethnicity can be kiwis too. Accept it. There are also lots new white immigrants (English, South African, European) in New Zealand, but somehow they were not mentioned in your "Asia minor" comment.

An entry fee at the gates of Auckland airport - aligned of course to the value of all infrastructural assets of NZ..........the entry fee should be seen as lump sum - user pays.......with tax credits to other taxpayers who have or are bearing the brunt of the costs. I think this scheme should be back-dated say 25 years ;-)

You mean viciously taxing the resources??

There is so much talk about increasing supply. But not enough focus is on why "demand" has been artificially driven up by opening our borders to foreign investment and excess immigration. Aucklanders (and New Zealanders) are basically having these shoved down our throats.

We need to keep skilled migrants coming in, and not immigrants on the investment category who simply invest their money in real estate, driving property prices up and locking locals out of home ownership.

What makes Auckland special are our natural environment, our beautiful suburbs, and our vibrant town centres. Obvious we need to intensify, but in the town centres and transport hubs (New Lynn, Panmure, Mt Albert , Remuera town centres), not a scatter gun approach.

Also there needs to be balanced development/growth in New Zealand. We should focus on developing other cities, such as Christchurch, Hamilton, Tauranga.

You are only right in part. The Foreign buyers have created a bit of a panic amongst local investors who have essentially ended up speculating. The solutions need to be multi-pronged; restrict ownership to residents only, put a cap on the amount of rent that can be charged (Most don't like this one, but I think it will have the most impact when done with the first), and look at supply.

I agree that local speculators have played a part too and ownership of residential property has to be residents only. Increasing supply is important, but it has been exaggerated. If we are desperately short on supply, then people would be without accommodation. But look on trademe rentals on how many rentals there are in Auckland.

The Irony - what he came for isn't here anymore

Talk-back radio last night - a migrant from the UK who has been in AKL for 26 years has spat the dummy and is moving out of AKL and going to Tauranga - yesterday he spent nearly 2 hours on the homeward journey, travelling from work to home in Pakuranga - he'd had enough

Why not just move closer to work?

Do you know how much a 3 bedroom house in Pakuranga costs?

I'm not sure if he worked or lived in Pakuranga - but either way I'm sure there is an affordable area closer to his work than two hours drive!

You're trolling right?

I ask seriously as anyone who actually lives in Auckland knows that isn't the case....are you sure you actually live here or are you a student in an inner city apartment who doesn't get out beyond the CBD much?

I assume he already owns a house somewhere in Auckland, so I'm saying why not sell that house and buy a new one closer to work than 2 hours away? If he works in Pakuranga, he could buy in Otara for example. If he works in the city, he could buy in Otahahu and catch the train, it takes about 20 minutes.
I live in Auckland and my commute is < 20 minutes. You don't have to have a 2 hour commute if you live in Auckland, its your choice.

I'm guessing his work is less than 30 minutes from home but it takes two hours to get there on a bad day and one hour on a good one. That is the reality of Auckland traffic.

Off-peak around midnight mid-week with limited traffic the journey from the CBD at the top of Nelson Street at start of the Southern Motorway to Pakuranga would be about 15 minutes

Had to go to K road and back twice in one day at peak hours from Pakuranga the other day , took nearly 4 hrs for 2 return trips, max speed <50kph.
Never again
Normally commute Pakuanga-Howick, which can take 10-15 mins for the 5km.

Possibly he wants to re-attain his work/LIFE balance. 26yrs ago Auckland was functional and affordable, but now....

Aucklanders think driving is work...

Someone who has been living in a place for 26 years is a local

And while they continue to do nothing, gaze at their navels and argue, people are going homeless.
They immediately need to halt discretionary immigration and release a whole heap of land at the perimeter. Otherwise things are going to get a whole lot worse before we see any improvement. this is not a situation with short lead times.
In a free market people should be able choose whether they want to live in a multi-story shoe box or a normal house and land in the suburbs, without the coercion of highly corrupt and artificial constraints..

The "free market" only exists in economic texts. The fact that you are calling for a halt to immigration in itself is not "free market". I agree largely with your solution: (1) limit immigration to skilled immigrants that contribute to this country (2) reduce, if not stop, investment immigrants (3) ban foreign buyers in residential property in New Zealand (4) actually enforce capital gains tax on residential property speculation (5) allow intensification in town centres and transport hubs (6) improve public transport (7) open up more land for development

Transport first, immigration last

Auckland is no longer a "Nice" place to live if you have to commute everyday to the CBD or past it. Even if all the right things that needed to be done started now, how long do you think it would take to fix the problem ? and the simple question is why have the problems not been sorted yet or even started on ? the answer is the government and in fact any government is going to be stuck between a rock and a hard place trying to change immigration and foreign investment here. Its almost too late to shut the gates anyway, what you have is the "New" New Zealand and its not a pretty picture if your in your 20's and 30's and want a house.

I lived in Auckland and it was a great place. I love to return there and I do regularly.
But it is out of control. The big issue is the lack of money to meet the demand for infrastructure. And the inhabitants won't face reality of what that costs. Politicians won't either and come up with flaky schemes that somebody else will pay.
Old Dove Myer was the last to have vision. Lots of the infrastructure being built now should have been done 50 years ago. Lots of what has been done has only been half done.
If the unfettered growth continues then the inhabitants will have to pay, and pay the catch up. A rates bill of $15K to $20K per house is not out of line for what is needed. Maybe more the $20K pa.
That's a ridiculous amount, but required for a functional city with such population growth v -- if that's what you want.
Or - you might like to change the weird growth pattern where net internal migration is out of Auckland, but the population is exploding because of the number of people coming in from overseas.

Government investment in housing plummeted after 1987. I don't care what party was in power, what's to blame is the economic ideology which was being followed 9and still is).
.
Is it fair to ask of home owners living in Auckland to shoulder the burden of investing in Auckland's infrastructure?
- Auckland is the economic powerhouse of the country, providing the largest chunk of tax take. This tax take benefits the country as a whole.

- Why should Aucklanders have to pay for failures of central government? The numbers of people coming into the country are not exactly unfettered, but they are more than the city can handle at
present.

- If you're thinking that the increase in population is boosting the economy of Auckland: it's not. It's driving up pressure on housing, public transport, hospitals, roads, water and electricity. It's also keeping wages down, as we now have a bigger labour pool.

- The rates system is seriously flawed and should be reviewed. Funding of local councils should be done on a means tested basis, and not on something as arbitrary as the house you happen to live in.

" Auckland is the economic powerhouse of the country..." Really? Akld has 33% of the population and generates 34% of GDP. That's a 1% powerhouse?

Powerhouse ? Actually it is not. And if it was, how come it can't support it's own infrastructure, especially the new stuff and the catch up required.
I go there often and it seems to me that the place does not have money, nor do the inhabitants.
But it's not to bash the place. It does have problems, and if the causes are not managed, the Aucklander will have enormous bills to pay -- if you want the music you have to pay the piper.
My own approach would be to manage the demand and population. In Auckland's weird situation with net internal New Zealand migration out of Auckland and so many people coming in from overseas, it is actually not that difficult to do.

If Auckland can't fund it's own development and infrastructure it is pretty obvious that the proposition of shoe horning so many people in doesn't add up. So, what is the point of it all. What is it adding to the NZ economy (as opposed to the pockets of a few vested interests) and what are the total costs of providing for all these people? As I said, if it is such a good thing economically then it should be generating bucket loads of cash to pay for the proposition. But it isn't, is it. It is just a money hole.

High intensity houses should be allowed only in Parnell and Remuera please. Then the fun will really begin. Don't they have a plan to convert a golf course there to apartments. That permission should be speed tracked.

If they build apartments on the Remmers Golf Course, would they be known as "The Holes"?

God, I hope so.

and be numbered A-S ?

Put a fence around Auckland and see what happens to it. Most of its 'wealth' is a result of clipping the ticket from the truly productive parts of NZ. Auckland deserves to be where it is because its a result of years of wishful thinking. Like most cities, it lives the life of a parasite.
Ask not ..."- Why should Aucklanders have to pay for failures of central government?..."
but ask instead, why should New Zealanders keep having to pay for the failures of Auckland.

Offcut can you detail the "truly productive parts of NZ". Tourism is our biggest export earner so I suggest Auckland scores a big tick on that mark. I get so tired of the Auckland bashing...better we look at NZ as a whole rather than silly Jafa comments ah?

Auckland is where the Airport is, the first toilet and the camper van, but really are we going to sell New Zealand based on what Auckland has to offer versus other 'World Cities". Wasn't in the Kiwi Fresh adds that I can recall.
I guess because all those logs go through Tauranga that they can claim forestry as their contribution as well?

Small thinking, so were are they going to land the planes...Christchurch? So what great city do you reside in offcut that produces so much?

Narrow thinking; have a look outside the metro.
As for small thinking, you are correct; wheres the Airport going to grow to now? Like the Port its getting a bit tight huh?

Lets take the Airport south of Auckland and see which way the tourists go, and lets move that Port and make some more room for lattes and see what Aucklands core strengths are. Methinks real estate, finance and gambling. Maybe thats enough? who knows.

Go easy on the ChCh bashing too huh!!

AIrport going to grow?..they have set aside room for a second runway, and can always claim some more of the Manukau. Never liked CHCH sorry its a big swamp and should have been built inland, abit snobby to boot. Im guessing thats your hometown.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1159...

How could I live in a city after my comments ha? Have lived in Chch; I think its the region that produces the most real wealth in NZ. Have lived in several cities and still work in one 3 days a week.

Last time I went to Auckland Airport it took me over 30% of my time to get less than 10% of my trip!! I am guessing that adds to the tourism experience /dollars cos it keeps them in the big smoke a few days longer at the start trying to get out, and based on that they come back a few days early just to be sure to get out again. Thats after the much vaunted motorway. Face it that town is running and still going back. Biggest carpark in the country...

Look Frazzer, don't get to upset about Auckland, its just doing what cities do all over the world; they start, they grow, they take, they die. Its as old as civilisation, thats why we have archeologists, to dig them up and figure what went wrong. have a read of Topsoil and Civilisation. Its an eye opener. A lot of the major port cities of the past are now buried or several miles inland. They took and took and stripped the surrounding lands, via tax or tribute, until finally there was nothing left. I guess its just natural. Auckland can't help it, neither can Chch. Stupid and sad...

Smith should be careful , he is running where angels dare to tread

We can now assume from this that National no longer want the East Coast Bays , Rodney and Upper Harbour electorate then, and are happy to throw them out in the name of expediency ?

That's 3 less seats in Parliament ( possibly 4 seats with lists )

Pissweak by Key - supports intensification, but only in areas that don't vote National anyway. Doesn't want to ruffle feathers with his rich backers.